Accounting Conversion to Studio Designer

Find out ahead of time

1. Is your prior system a cash basis or accrual basis?
2. Sales Tax

Prepare

1. Pick a Start Date
2. Reconcile all cash and credit card accounts through the end of the month
3. Print, review and correct any erroneous items on the following reports
4. Make deposits for ANY undeposited funds
5. Print a Trial Balance and review it for accuracy

Start entering

1. Enter ALL items (not yet invoiced in your old system) into Studio 

2. Enter Accounts Receivable

3. Enter Accounts Payable
4. Enter Vendor Deposits
5. Enter Client Deposits
6. Make a Journal Entry to Record Beginning Accounting Balances
7. Enter Bank Reconciliation Outstanding Items

Studio Designer is our basis for this document, but it is applicable to all accounting systems. 

These are very general instructions and assume that you use your current accounting system in a very standard way.

There are exceptions to everything.

If you need individualized instructions, please contact our support department by emailing support@studiodeigner.com. Current support rates apply for individualized support help.

Find Out Ahead of Time

1. Is Your Prior System a Cash Basis or Accrual Basis?

This will define how data is entered and what dates to use when posting transactions. 

If you don't know, check with your CPA prior to starting.

*If you see “Work in Progress” or “Work in Process” on your balance sheet, please see Notes at the end of this document.

When printing the reports specified below, make sure you print the ones that match your tax basis (cash or accrual).

2. Sales Tax 

We assume that if you have an invoice, you have already paid sales tax on the items. 

If you have not, you will need to manually add these items to your next sales tax return.

Prepare

1. Pick a Start Date

The end of a month is best.

It doesn’t need to be the end of the year, but if you can avoid starting in the middle of the month, it will be much easier for you.

From this date forward ALL new items and time billing entries will be entered into Studio Designer and only Studio Designer.

2. Reconcile All Cash and Credit Card Accounts Through the End of the Month

• If your start date is 9/1, reconcile through your statement that ends closest to 8/31.
• Print a copy of the reconciliation report and keep it with the rest of the reports that you will print in the next section.
• Review the transactions that are not cleared and correct any old or erroneous entries.  It's important that we only have correct and current entries.
• Reprint your reconciliation report if you make any changes.
  
  

3. Print, Review and Correct Any Erroneous Items on the Following Reports

• Customer Balance Detail or Accounts Receivable (listing all invoices with unpaid balances)
• Vendor Balance Detail or Accounts Payable (listing all orders with unpaid balances)
  
  

4. Make Deposits for ANY Undeposited Funds.

5. Print a Trial Balance and Review it for Accuracy

• Make any necessary changes and print a final copy which we will use to enter beginning balances into Studio Designer.
• Confirm that all cash accounts and credit card balances equal the Register Balance on the printed copies of the reconciliation reports that you printed in #2 above.

• Confirm there is NO balance in Undeposited Funds.

• If you are reporting on an Accrual Basis, confirm that the totals on your Client Balance Detail and Vendor Balance Detail have matching Accounts Receivable and Accounts Payable balances on the Trial Balance.

• Compare accounts on the Trial Balance with your Chart of Accounts in Studio Designer and write the corresponding account from Studio Designer on your Trial Balance.
  • Add any missing accounts into Studio Designer. (Open Chart of Accounts)
    
    

Start Entering

Most of our new users are coming from simple accounting systems that do NOT carry Work in Progress (or process).

In this case, we assume that Accounts Payable was generated when a vendor invoice was received, which also signifies that the item is complete and the client was invoiced when the vendor invoice was received.

In this case, Cost of Goods Sold was recognized when accounts payable was created, so we don’t want to duplicate expenses for these items.

These instructions also assume that Accounts Receivable, Income, and Sales Tax were recognized at the time you invoiced your clients.
 

1. Enter ALL Items (not yet invoiced in your old system) into Studio

• Create an item in Studio Designer for each item in your prior system that has not yet been invoiced to your client.
• Enter the full purchase cost and the full selling cost for each item. 
• If the item has been ordered, add it to an order and reference the original order # in the description (optional).
• We will account for deposits from clients and deposits to vendors in the steps below.

2. Enter Accounts Receivable

You will create Activity/Time Billing invoices for each Invoice on your A/R Aging.

If you have negative amounts that represent Client Deposits, please see Enter Client Deposits below.

Create one Activity/Time Billing entry for each invoice total.

• Choose an Activity that posts income to the account “Income Time Billing”. 
• Choose an employee.  It can be anyone you want for these invoices.
• Enter the client from your Customer Balance Detail report.
• Leave Group/Vendor/Misc Company blank.
• Enter “Prior Invoice # _____ Dated:_______” for the description (fill in the blanks)
• Type = Calendar, Billing Code = Billable
• Choose Time Billing for Sales Code.  This will offset the negative income recorded when you entered the A/R balance into Income Time Billing above.
• The Start, End, and Completed dates will be the last day of the month prior to your Starting Date.
• Enter a Quantity of 1 and Client Rate = Open Balance from the A/R Aging.
• Make sure that Taxable = NO.
• Click Save & Close.
• Change your Filter (top right of screen) to All and View to Time Billing so you can see the entry you just made.
• Enter “Prior Invoice # _____ Dated:_______” to the right of Description  (center right of screen) and fill in the blanks.
• Click the box to enter a "check-mark" under Invoice # to select the item and click the Invoice icon at the top of the screen.
• Repeat for each Invoice on the Customer Balance Detail report.

3. Enter Accounts Payable

• Accrual Basis
• Cash Basis
  
  

ACCRUAL BASIS:

Create a new account titled "Cost of Sales" (Chart of Accounts)

Create one Pending Payment for each line on the Vendor Balance Detail

Do not enter any amounts for items that were not yet invoiced. These items should have been entered in Start Entering #1 above.

If you have negative amounts that represent Vendor Deposits, please see Enter Vendor Deposits below.

• Select Money Out
• Select Office Payment
• Payment Code = Print, leave Check # and Check Date blank.
• Description should be “Prior Invoice #_______PO:________” Fill in the blanks.
• Enter the Client ID, Vendor Invoice #, Terms, etc.
• Check Hold if you will not be paying right away.
• Click New Distribution and choose Cost of Sales for the Expense Account. 
• Click Save & New.
• Repeat for each line on your A/P Aging report.

CASH BASIS:

Create one Pending Payment for each line on the Vendor Balance Detail. 

• Select Money Out
• Select Office Payment
• Payment Code = Print, leave Check # and Check Date blank.
• Description should be “Prior Invoice #_______PO:________” Fill in the blanks.
• Enter the Client ID, Vendor Invoice #, Terms, etc.
• Check Hold if you will not be paying right away.
• Click New Distribution and choose an Expense Account appropriate for the type of expense being entered.  
  • If this is for a client item that was previously invoiced, choose Cost of Sales.
• Click Save & New.
• Repeat for each line on your A/P Aging report.

4. Enter Vendor Deposits

Record payments previously made to vendors for items that were entered in Start Entering #1 above:

In Quickbooks, these amounts are frequently listed as negative amounts on the Vendor Balance Detail report.

ACCRUAL BASIS:

• View the Order
• Select Payment at the top of the screen.
• Change Payment Account to "Cost of Sales"
• Check #: If you know the original check # you can enter it here, if not, it can be something generic like "transfer" or "bb".
• Date can be any date prior to your start date  (if you know the actual original payment date, use it).
• Enter the applicable amounts paid in the "Amount To Pay" box beside the items, then select "Post Vendor Payment".

CASH BASIS:

• View the Order
• Select Payment at the top of the screen.
• Change Payment Account to "Cost of Sales"
• Check #: If you know the original check # you can enter it here, if not, it can be something generic like "transfer" or "bb".
• Date can be any date prior to your start date  (if you know the actual original payment date, use it).
• Enter the applicable amounts paid in the Amount To Pay box beside the items, then select "Post Vendor Payment".

5. Enter Client Deposits (This is all cash received on items that have not yet been invoiced).

In Quickbooks, these amounts are frequently listed as negative amounts on the Customer Balance Detail report.

The items for these deposits should have been entered in #1 above.

When you enter the items in #1 above, be sure to enter them for the entire selling cost of the item even though the client may have already paid part of it (unless you invoiced the part that they paid).

Post a Client Deposit for Amounts Belonging to Items in Progress

• Select Money In
• Select Method = Receive and Apply
• Select Your Client
• Enter the date prior to your Start Date (if you know the original date, you can use it as long as it's in an open accounting year)
• If you know the client's check # you can enter it here (or enter something like bb or transfer)
• Description = Transferred from prior system
• Change the Cash Account to Income Time Billing
• Enter an "Amount to Apply" beside the applicable item or items
• Select Post

Post a Client Deposit for Amounts Not Belonging to Specific Items

• Select Money In
• Select Method = Receive Payment
• Select Your Client
• Enter the date prior to your Start Date
• If you know the client's check # you can enter it here (or enter something like bb or transfer)
• Description = Transferred from prior system
• Change the Cash Account to Income Time Billing
• Select Post

These amounts will be added to Funds Available

6. Make a Journal Entry to Record Beginning Accounting Balances

On your Trial Balance (Write “Cost of Sales” beside your Accounts Payable balance, “Income Time Billing” beside Accounts Receivable, "Income Time Billing" beside Client Deposits and/or Client Retainer balances and "Inventory Adjustment" ** beside Inventory.)

• Select Accounting>Select Journal Entry  Select the blue New Journal Entry button.
• Select Adjustments for the Journal field.
• The Journal Date should be the day prior to your Starting Date.
• Choose the account in Studio Designer that is written beside the account on your trial balance.
• Type BB in the reference and be sure that this is in the reference for ALL account entries.
• Enter the amount from your Trial Balance.          
• Enter Prior System Beginning Balances in the Description field and leave Reoccurring List, Client and Vendor all blank (except for Accounts Payable)*.
• You will click Save & New for each account that has a balance on your Trial Balance.  Click Save on the last entry.
• Once ALL balances are entered the Journal Total should be 0.00
• Click Print Entries if you want a printed copy.  Then click Post Entries.

• Payment Code = Manual, enter the original Check # and Check Date from Quickbooks (assuming all checks are from open accounting year).
• Description should be “QB Outstanding” or can be whatever you prefer.
• Leave Client ID, Vendor Invoice #, Terms, etc. blank.
• Click New Distribution and choose your cash for the Expense Account (the same one listed above as Cash).  This makes it so that your actual cash balance is not affected.
• Click Save & New.
• Repeat for each un-cleared check on your bank reconciliation that is dated before your Studio Designer start date.
• When all have been entered, choose Payment Code on the main Pending Payments list screen and click Post Payments.

Un-cleared receipts will be entered in Money In as Miscellaneous Receipts.

• Select Receive Misc in 1. for Payment Method.
• We suggest using your company name (or ID entered in Addresses) as the Receive From in 2.
• Enter the check date, check number, and amount from Quickbooks.  There should be no uncleared receipts that are dated more than a week or so prior to your Start Date.
• Description should be “QB Outstanding”.
• Income Account should be the same as your Cash Account directly above the Income Account.  Just like with the checks, this makes it so this entry does not affect your actual cash balance.
• Payment Type is not required, but you can fill it in if you choose.
• Click Post Payment.

Reconcile the positive side of the un-cleared checks and the negative transaction of un-cleared receipts.

• Select Reconciliation
• Choose Cash Receipts for the Journal
• Change your Statement Date to your Start Date
• Click Reconcile beside the negative entries that you entered for QB un-cleared receipts.
• Change the Journal filter to Cash Disbursements and click Refresh
• Click Reconcile beside the positive entries that you entered for QB un-cleared checks.
• Review the Outstanding calculation at the top right, the Receipts and Disbursements should now match your Reconciliation report from Quickbooks and the Bank Balance should match your ending Balance on your most recent bank statement as well as the Cleared Balance from your Quickbooks Reconciliation report.

You are all set to begin using Studio Designer exclusively!